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cbwang888 (27.32)

Mr. Market upgraded US bonds

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August 08, 2011 – Comments (7) | RELATED TICKERS: TBT , GLD , UUP


US Treasury bonds soared after all the debt limit talks and S&P credit rating downgrade. What is the panic all about? If they are not safe, why the bond price goes up?  

7 Comments – Post Your Own

#1) On August 08, 2011 at 9:12 AM, outoffocus (26.09) wrote:

Irrational exuberance?  Honestly I am not surprised.  I didnt not expect the market to act rational after the downgrade.  Heck if the stock market went up 2% I wouldn't be surprised.  I'm also not surprised about gold hitting record highs today.  I am surprised, however, about silvers performance.  Whats that all about?

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#2) On August 08, 2011 at 9:59 AM, cbwang888 (27.32) wrote:

Poor man's gold is selling by poor men and be bought by richer men. So it went up 5% in Asian trading and shrunk to < 2% in US trading ...

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#3) On August 08, 2011 at 10:12 AM, ChrisGraley (99.66) wrote:

ppt

 

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#4) On August 08, 2011 at 10:45 AM, outoffocus (26.09) wrote:

I was wondering how the market would react today considering everyone was expecting the market to fall. For short sellers isn't that like guaranteed profit?

And where exactly is the PPT going to step in? Stocks or treasuries?  Seems to me they are working harder in Treasuries (or at least someone is).

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#5) On August 08, 2011 at 11:22 AM, cbwang888 (27.32) wrote:

PPT is busying watching online porn ...

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#6) On August 08, 2011 at 12:16 PM, leohaas (98.74) wrote:

The downgrade is bogus. The US will never default on Treasurys. Unless the US collapses, like some doomsayers are predicting (perhaps, hoping for).

In times of economic uncertainty, investors abandon risky investments and invest in safe ones. Like it or not, Treasurys are safe, at least from default. They are very liquid, so if inflation picks up (like dollar detractors will say), you can always sell!

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#7) On August 08, 2011 at 7:12 PM, rfaramir (97.34) wrote:

US debt won't likely default in paper terms, but printing money to pay debts is default in real tems. You know, the ones people really care about. Are your investments safe if their principal is safe in nominal terms? Or only if they retain their real purchasing power?

And there IS talk of selective default. Ordering the cancelling of the bonds held by the Federal Reserve has been bandied about. The old "we owe it to ourselves, so it's not real, let's cancel it" nonsense. The money supply increase that QE has caused will be irreversible if those bonds are cancelled. And anyway, the Federal Reserve is NOT us. It is a private company, formed by Congress but owned by private individuals and banks.

End the Fed! But don't pretend there will be no effects of cancelling its US bonds. 

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